Obamacare is Poison

Thank you for finally including coverage of the people who are paying for this mess. (BTW, I support universal health care or single payer–Medicare for all–at least that gets rid of the ridiculous 50 state bureaucracies and the high profits of insurance companies).

We, like many people who ALREADY HAD INSURANCE, found ourselves unable to keep our plan (which itself had gone up in price about 10% every year since the announcement of Obamacare). We were forced not only to go through the incredibly Byzantine process of finding another, but we could only get something more expensive and less useful. Basically, we pay for everything now because the deductible is so high–but we (nearing retirement) get MATERNITY BENEFITS and detox. Hooray.

We are paying for those other folks who now have coverage. Including the people with a child who want a special nursing agency 24/7–not the agencies available under Medicaid. Including the woman who worked as a house cleaner or nanny all her life and (apparently) paid no taxes and therefore cannot get Medicare/SSA disability.

Moreover, our premiums are surely going up next year, even further. Worse still for the program overall, the premiums of all the people we subsidize will be going up even more. Soon, the system will fall of its own weight. There is no viable financing mechanism.

So, yeah, things are just peachy. Conservatives, keep bitching about how Obama is a socialist, or born in Africa, or whatever else you obsess about in lieu of the real world. Liberals, keep cheering for the wonderful success of Obamacare, by which you mean that you and your friends are all now getting healthcare subsidized by the very people who always did the right thing and paid for health insurance for themselves and were promised they could keep their plans. Heaven help us all.

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ObamaCare is a failure. For anyone who thinks this is a misprint because no Democratic activist would make such a comment, let me add that it is too big, too complicated and too expensive. Without a public option within its network of exchanges, ObamaCare is a giant blank check to the insurance companies that pushed it through Congress. It punishes responsible consumers like me and treats younger individuals as fools who are expected to pay the bills while not paying attention.

Now we learn in videos that came to light this week that Jonathan Gruber, MIT economist and a key architect of the Affordable Care Act, proudly relied on his perceived “stupidity of the American voter” as the basis for designing ObamaCare. Such comments, along with the program’s notoriously dysfunctional website and false assurances that people can keep their previous health plans, are insults to every citizen regardless of party.

The Affordable Care Act was designed to improve access to health care for all Americans and will give them another chance at getting health insurance during open enrollment starting this Saturday. But critics say the ACA is also accelerating the demise of rural outposts that cater to many of society’s most vulnerable. These hospitals treat some of the sickest and poorest patients — those least aware of how to stay healthy. Hospital officials contend that the law’s penalties for having to re-admit patients soon after they’re released are impossible to avoid and create a crushing burden.

Americans are generous. We wanted to help those who couldn’t afford insurance. The affordable care act has not delivered. The rancor is palpable. Why did they have to push it through without reading it and why did they have to lie to us to get it passed? How does that remotely make sense????? And how does this guy that disses the people get to be a pointy headed professor making hundreds of thousands of dollars putting down the people that pay his salary?

One of the surveys, by the consulting firm McKinsey & Co., shows that, of people who had signed up for coverage through the marketplaces by last month, just one-fourth described themselves as having been without insurance for most of the past year.

YellowJacket writes:
3:55 PM EST
Can one imagine the outrage and demands if a R President pulled a stunt like this? The WaPo would be screaming and jumping up and down for impeachment hearings.

Pabloat8000 writes
3:49 PM EST
0bamacare is not about insurance or healthcare or the uninsured, it’s about power.

FreedomWarrior writes:
3:54 PM EST
One thing that’s clear — it’s the worst law ever passed in the history of this country…. A debacle of an order of magnitude that only thoughtless liberals can defend.

gnsherman writes:
5:42 PM EST
hese are the things that I see from the republican party and people seem to forget. Now, they complain. How about House Republicans who refused to appropriate the money the Department of Health and Human Services said it needed to properly implement the ACA? How about Senate Republicans who tried to intimidate Sebelius out of using existing HHS funds to implement the ACA? “Would you describe the authority under which you believe you have the ability to conduct such transfers?” Sen. Orrin Hatch demanded at one hearing. It’s difficult to imagine the size of the disaster if she hadn’t moved those funds. How about congressional Republicans who refuse to permit the packages of technical fixes and tweaks that laws of this size routinely require? How about Republican governors who told the Obama administration they absolutely had to be left to build their own health-care exchanges — you’ll remember that the House Democrats’ health-care plan included a single, national exchange — and then refused to build, leaving the construction of 34 insurance marketplaces up to HHS? How about the coordinated Republican effort to get the law declared unconstitutional — an effort that ultimately failed, but that stalled implementation as government and industry waited for the uncertainty to resolve? How about the dozens of Republican governors who refused to take federal dollars to expand Medicaid, leaving about 5.5 million low-income people who’d be eligible for free, federally-funded government insurance to slip through the cracks? The GOP’s strategy hasn’t just tried to win elections and repeal the ACA. They’ve actively sought to sabotage the implementation of the law. They intimidated the people who were implementing the law. They made clear that problems would be exploited rather than fixed. A few weeks ago, they literally shut down the government because they refused to pass a funding bill that contained money for the ACA.

WellRead729 writes:
5:36 PM EST
Ah, if only the shower was real….. Here’s some real math for you. A southern Blue Plan, who has been all-in with PPACA since Day 1, has managed to sign up roughly 30,000 people. Let’s just call their average monthly premium (individual and government contribution) $500/month. That’s $15m in new revenue per month. Yeah! Right? Wrong. They have already identified over 100 people in this new population, who in their FIRST MONTH OF COVERAGE used in excess of $100k in pharma expenses ALONE. And that’s just the screen of the first 10,000 claims….. Using my math skills, I can see that as soon as 150 of the 30,000 enrolled are identified who consume that much in claims, the entire effort goes underwater. And let’s not forget that the federal programs to offset losses require losing quite a bit of money before they kick in to cover 10-15% of the losses…and they NEVER cover more than 50% of the losses no matter how big they get…. It’s a shower all right…a Soaking might be more accurate. WR

CarolT1 responds:
5:40 PM EST
And here’s the real world for YOU: The whole thing has been RIGGED to make sure they profit! Between risk adjustments and federal reinsurance payments, they’re almost guaranteed to come out ahead. And if they don’t, all they have to do is go crying to the government to change the formula for them. “It may actually be a detriment if a company insures a large proportion of young policyholders.” (When adverse selection isn’t: Which members are likely to be profitable (or not) in markets regulated by the ACA. By Jason Petroske and Jason Siegel. Milliman Healthcare Reform Briefing Paper, Dec 17, 2013.)

It’s very reassuring that the president’s signature legislation and 1/6 of the economy sits on a “glitch”. Republicans wanted to delay it for a year which would have given the necessary time for unit, system, and integration testing. Instead, we got a government shutdown and a “glitched” healthcare system that nobody can trust. .

Prof-Dr-G wrote:
2:51 AM EST

I bet they really would be shocked if they had enough sense to understand that we are bankrupt. I guess the realization will come like healthcare as the “house of cards” is tumbling.

blakely1 wrote:
12:49 AM EST

Traditionally young college graduates start out with low salaries. The early years are a struggle, Why are the staffers in Congress any better than my grandson? IMO they are not.

Prof-Dr-G responds:
2:53 AM EST

They are more important because they have degrees in law and political science, and they work for the plutocrats. They deserve more than you. It is your job to pay the bills and keep your mouth shut.

“That means that no matter how we reform health care, we will keep this promise to the American people: If you like your doctor, you will be able to keep your doctor, period. If you like your health-care plan, you’ll be able to keep your health-care plan, period. No one will take it away, no matter what.”

The Facts

The president’s pledge that “if you like your insurance, you will keep it” is one of the most memorable of his presidency. It was also an extraordinarily bold — and possibly foolish — pledge, unless he thought he simply could dictate exactly how the insurance industry must work.

At the time, some observers noted the problems with Obama’s promise.

After Obama made his speech before the AMA, the Associated Press ran a smart analysis —
“Promises, Promises: Obama’s Health Plan Guarantee” — that demonstrated how it would be all but impossible for the president to keep that pledge. The article noted that the Congressional Budget Office assumed that 10 million Americans would need to seek new insurance under the Senate version of the bill.

Meanwhile, in the Republican weekly address on Aug. 24, 2009, Rep. Tom Price (R-Ga.), a doctor, made this point: “On the stump, the president regularly tells Americans that ‘if you like your plan, you can keep your plan.’ But if you read the bill, that just isn’t so. For starters, within five years, every health-care plan will have to meet a new federal definition for coverage — one that your current plan might not match, even if you like it.”

The administration is defending this pledge with a rather slim reed — that there is nothing in the law that makes insurance companies force people out of plans they were enrolled in before the law passed. That explanation conveniently ignores the regulations written by the administration to implement the law. Moreover, it also ignores the fact that the purpose of the law was to bolster coverage and mandate a robust set of benefits, whether someone wanted to pay for it or not.

The president’s statements were sweeping and unequivocal — and made both before and after the bill became law. The White House now cites technicalities to avoid admitting that he went too far in his repeated pledge, which, after all, is one of the most famous statements of his presidency.

The president’s promise apparently came with a very large caveat: “If you like your health care plan, you’ll be able to keep your health care plan — if we deem it to be adequate.”

Linda Otoole · Top Commenter · Cincinnati, Ohio
Our family has been uninsured for two years because the cost of insurance is too much for us given the limited benefits and high deductibles. Obamacare was supposed to help us, but these new plans are more expensive with the same high deductibles. And, there is no plan that includes our providers and Children’s Hospital for our kids. To add insult to injury, we are paying for other people’s insurance and subsidies through our taxes when we cannot afford to buy our own insurance. Thanks, but no thanks. We will pay the penalty. When will the feds stop trying to help us? We cannot afford any more government help.

As technical failures bedevil the rollout of President Obama’s health care law, evidence is emerging that one of the program’s loftiest goals — to encourage competition among insurers in an effort to keep costs low — is falling short for many rural Americans.

While competition is intense in many populous regions, rural areas and small towns have far fewer carriers offering plans in the law’s online exchanges. Those places, many of them poor, are being asked to choose from some of the highest-priced plans in the 34 states where the federal government is running the health insurance marketplaces, a review by The New York Times has found.

I’m a local independent insurance agent. Over the last 60 days, the government has done a deplorable job in preparing our industry for this onerous Obamacare law. Our training and certification, administered by Medicare, should have been prepared months ago, but has only recently become available. It has been plagued with problems.

The government plans to use inexperienced, unlicensed people (“navigators”) with no professional liability coverage to assist in enrolling people in these plans. What could go wrong with that?

It is a fact that at least one major carrier offering coverage in Cincinnati is only offering an HMO option on the exchange and only for residents of Hamilton, Butler and Warren counties. Some carriers will not participate.

Does this fit the promise that we could affordably keep our plan and doctors?

Personally, my insurer has opted not to continue coverage for the AARP under-65 members. Rates have increased dramatically for nearly everyone this year. This is not “better and affordable coverage.” Yes, I will have the option to purchase a new plan, but to maintain a strong doctor network, I’ll have to purchase a plan off the exchange at a higher price.

The fact is that this law is loaded with mandates that are not going to keep costs down. Major portions of it have been either eliminated or delayed. Why? Because they were not economically feasible. This law penalizes the job providers and taxes our economy unmercifully at a time when people need jobs. The cost to certain parts of our population will be seen in the increased premiums and reductions of coverage. This is especially true of our seniors.

As it stands now, one week away, I don’t even have rates to advise people of the costs. Official rates and benefits won’t be available until Oct. 1.

It sounds like the “we have to pass it to see what’s in it” philosophy. We can’t afford this risk.

During his Tuesday remarks at the Clinton Global Initiative, President Obama admitted that his health care law raises taxes: “So what we did — it’s paid for by a combination of things. We did raise taxes on some things.”

“Some things” is an understatement. Below is just a partial list of Obamacare’s new or higher taxes on Americans:

Experts say the down economy is the overwhelming reason that national health care spending has been growing at historically slow rates in recent years.

…The Kaiser Family Foundation analyzed the trend and determined that the economy was responsible for 77% of the slow growth rate. Plus, the study said, the rate of growth is expected to increase as the economy continues to pick up.

Cruz cited an outdated quote from Mark Zandi, chief economist of Moody’s Analytics, to back up his claim that Obamacare is slowing job growth.

The best thing opponents of Obamacare have going for them is Obamacare. The implementation glitches and the ensuing delays have created a perverse system: Individuals must purchase insurance with no out-of-pocket cost cap while employers are under no obligation to provide insurance. Aside from the gross unfairness and the difficulty in rolling out the plans (e.g. exchanges aren’t set up, there is no guarantee personal information will be protected, the centrality of a corrupted IRS) Obamacare’s debut is bringing home several unpleasant realities.

In January, a study by Kurt Giesa and Chris Carlson in the magazine of the American Academy of Actuaries estimated that 80 percent of Americans below the age of 30 in the individual market would find themselves with higher premiums next year than this year, even after subsidies. Early data from the states suggest this estimate may not be far off the mark. . . .The young and healthy are expected to enable that system to function in two ways: They will pay significantly higher rates than they do now, and more of them will buy coverage. But there is an obvious contradiction between these two expectations. If the cost of something goes up, why would more people buy it?

Obamacare’s promise of universal, affordable health-care insurance is illusory; it will be neither universal nor affordable.

Second, young and healthy voters will be getting a raw deal and they know it. If they behave rationally and take up Supreme Court Chief Justice John Roberts offer — don’t insure and just pay the tax — the system will collapse. The pool of covered people in the exchanges will be older (although Medicare remains in place for those 65 years and over) and sicker, the costs will increase, and the alternative will be to squeeze care (i.e. ration) or hugely increase taxes. Levin sums up: “Its mistreatment of the young and healthy is therefore actually a huge problem for the law, and points to the core of the new system’s economic irrationality, or rather to its failure to contend with how people understand their economic options.”

The other adverse consequences (stifling medical device companies, over-pricing the cost of labor, increases in part-time work) will also be felt as Obamacare works its will on the economy by taxes, mandates and more taxes.

It is a misnomer then to call the problems ones of “implementation.” Even if states get their exchanges up and even if the government prevails in laws challenging the obligations of religious-based employers and even if the exchanges manage to secure personal data, the underlying assumptions on which Obamacare rests — young and healthy people can be corralled into the system to subsidize old and sick people is illogical. If you are under 26 years old then you likely stay on your parents’ plan. If you’re over 26 and are making little income you probably qualify for expanded Medicaid insurance. And if you are over 26 and have an income but no employer-based coverage you probably pay the fine and sign up for subsidized care when and if you get very ill or seriously injured. Besides all that, you’d still have the impact on hiring and the part-time work boom.

Republicans should stop diverting attention from these real problems for Democrats too an unpopular stance for Republicans (shutting down the government). They must make Democrats own the Obamacare debacle and make the case to voters that they should be fired for foisting and then refusing to delay or modify the deeply flawed plan.

Study: Obamacare rate concerns ‘overblown’ A Rand Corp. report finds that, with the Affordable Care Act, workers at firms employing fewer than 100 people are expected pay almost 6 percent less in premiums in 2016 than without the law.

CBS News poll finds more Americans than ever want Obamacare repealed
The poll also found just 13% of Americans say the health care law will personally “help me” while 38% said they believe the law will personally “hurt me.”

Enrolling healthy, young adults crucial to success of new health-care law

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Groups go door-to-door to encourage enrollment in Obamacare

For the law to succeed, groups such as Enroll America, whose officials include several veterans of Obama campaigns, will need to cajole millions of Americans, including many healthy ones, to enter the insurance market. It could be a tough sell. Confusion about the law is rampant. The online insurance sites, which open for enrollment Oct. 1, could be tricky. Some people who rarely need medical care might view even low-cost health plans as too pricey.

Three states could have an outsize role in the success — or failure — of Obamacare.

California, Florida and Texas are home to more than one-third of the nation’s 46 million uninsured people. If the White House and its allies can’t convince large chunks of the uninsured in those three states to enroll in the Affordable Care Act’s new insurance exchanges, the administration could have a very hard time reaching its enrollment goals.

“They have set out 7 million as their goal for enrollment in the first year and politically, getting close to 7 million is important,” said Caroline Pearson, vice president at Avalere Health. The enrollment period starts Oct. 1 and runs through March.

Supporters of the Affordable Care Act acknowledged rates would go up, but also said consumers will get plans with better coverage.

“A lot of the lower rates have been a result of people having really poor coverage with high deductibles with really minimum coverage,” said Vincent DeMarco, president of the Maryland Citizens Health Initiative. “Everybody is going to get full coverage now. When you have coverage with a $5,000 deductible, you basically have no coverage.”

The Insiders: Democrats are trying to suppress the confusion and hide the cost of ObamaCare

By Ed Rogers, Published: July 1, 2013 at 6:45 pm

I don’t know if Members of Congress will be hearing about it in town hall gatherings and other meetings back home over the Fourth of July recess, but the rolling thunder of the approaching ObamaCare train can be heard in the distance. Smart Democrats are beginning to get frantic about the need to suppress the confusion and hide the cost of ObamaCare between now and the 2014 midterm elections. We are just three months away from the October 1st enrollment start date and so far, nothing about the ObamaCare implementation process should be politically encouraging for Democrats. In fact, the more people learn about ObamaCare, the more frightened they become.

Right now, small businesses across America are making the final determinations on how to reduce the working hours of their employees so fewer employees qualify for the mandated, employer-provided health insurance. Employers are also deciding whether it makes more economic sense to pay a fine to the government or pay for healthcare benefits for their employees. What this means is that hundreds of thousands – and perhaps even millions – of Americans will learn that they are being dismissed from their employer’s healthcare coverage.

The healthcare pink slips will start raining down in late summer and early fall. This will push people into the healthcare exchanges, where, in some cases, people will be writing health insurance checks for the first time. And in many cases, people will be facing increased health insurance costs, particularly if they are young and healthy. The negative effects on personal income and the overall economy will be undeniable. Sometime next year, before the elections, the penalties associated with not having or providing health insurance will begin to pour in. Will the fines come in the mail? Will you be able to appeal? What happens if someone doesn’t pay? No one knows. Or, no one who knows is talking. The consequences of ObamaCare are being hidden.

Today’s Wall Street Journal article, “Health-insurance costs set for a jolt” hints at the debacle that is to come. At some point soon, it’s going to be undeniable that ObamaCare is nothing but another federal entitlement, where those who are young and healthy bear the direct cost of subsidizing those who are not.

In midterm elections, those who vote tend to be more engaged voters. In other words, these voters will notice if they have health insurance that is more expensive but offers less coverage than what they had before ObamaCare. Some of the Democrats’ reactions will be predictable, i.e. blaming Bush and blaming Republicans, or for a while, denying the obvious. But that won’t work forever. One of the worst sins you can commit in politics is to say something that’s different from what people can see for themselves. There is no chance that Obamacare will perform as promised and when it doesn’t, voters will be looking for relief.

Other threats to [economic] recovery include…Obamacare’s disincentives for job creation (example: Because firms with fewer than 50 workers aren’t required to provide health insurance, the temptation is to stop hiring at 49).

Since late 2007, the Fed has pumped more than $2 trillion into the U.S. economy by buying bonds. Economist Allan Meltzer asked: “Why is there such a weak response to such an enormous amount of stimulus, especially monetary stimulus?” The answer, he said, is that the obstacles to faster economic growth are not mainly monetary. Instead, they lie mostly with business decisions to invest and hire; these, he argued, are discouraged by the Obama administration’s policies to raise taxes or, through Obamacare’s mandate to buy health insurance for workers, to increase the cost of hiring.

Health Care: As Democrats grow increasingly worried that ObamaCare will explode on the launch pad just as midterm elections get going, the Obama administration seeks to pin blame on Republicans. Good luck with that.

Earlier this week, Health and Human Services head Kathleen Sebelius admitted that she didn’t realize how complicated getting ObamaCare off the ground would be.

Sebelius complained that “no one fully anticipated” the difficulties involved in implementing ObamaCare, or how confusing it would be with the public.

She wasn’t talking about the massive and impossible task of imposing central planning on one-sixth of the nation’s economy.

Instead, she was trying to find a way to blame Republicans for ObamaCare’s failures when the inevitable problems start emerging.

Rather than say “let’s get on board, let’s make this work,” recalcitrant Republicans have forced her to engage in “state-by-state political battles,” Sebelius said at a Harvard School of Public Health forum. “The politics has been relentless.”

So let’s see if we get this. Democrats shoved an unpopular, expensive, ill-conceived and poorly written law down the country’s throat with no Republican support, and without bothering to see whether states would want to take on the thankless and costly task of helping the feds implement it.

And now that many of these states are rebelling, it’s the Republicans’ fault?

Sebelius’ fellow Democrat, West Virginia Sen. Jay Rockefeller, had a more accurate take on the problem the administration faces: the law is “probably the most complicated piece of legislation ever passed by the United States Congress” and “if it isn’t done right the first time, it will just simply get worse.”

Rockefeller, like a growing number of Democrats, realizes that ObamaCare is shaping up to be a political disaster for the party next November.

The influential Cook Political Report noted earlier this month that almost all of the Democratic insiders they talked to “voiced concern about the potential for the issue to hurt Democrats in 2014.”

And just what could explain these concerns?

Maybe it’s because even Sebelius now admits that ObamaCare will force insurance claims up 32%.

Or possibly it’s because, despite endless assurances that the insurance exchanges would be ready on time, the administration had to delay for a year a key feature meant to give small business a choice of health plans.

Or because neither Sebelius nor the states have provided evidence they can get the rest of the exchanges ready by Oct. 1, when ObamaCare’s open enrollment begins.

Or perhaps Democrats’ fears stem from state insurance commissioners warning of a rate shock once ObamaCare’s “community rating” rules and benefit mandates start. Or from rising evidence the law is hurting job growth as small businesses try to avoid its costs.

None of this, mind you, has anything to do with Republicans. And if the GOP were smart, it’d be focused on making sure that, come next November, the public knows that, too.

The public still doesn’t like Obamacare and still doesn’t like President Obama’s handling of health care in general.

…Among those flaws are the spike in insurance costs, the impact on the debt (not stripped of the unworkable CLASS Act that was designed to offset Obamacare costs), the shift to part-time work (and, the Los Angeles Times reports, reduction in part-time hours), the slow rate of new job creation and the uncertainty related to employers dumping their own insurance. That doesn’t include the impact Medicaid expansion is having on state budgets, the new tax for upper income taxpayers, the medical device tax (which Senate Democrats want to repeal), the cuts in Medicare advantage and the infringement on religious faith via the HHS mandate on birth control and abortion-inducing drugs.

…Obama’s health care law was designed to expand access to the uninsured. It’s a noble goal, if not necessarily a smart political priority. (It’s more popular to advocate for improved health care, not expanded access.) But to win support for the law, Obama claimed it would lower costs, improve the quality of care and not force anyone off their current health care plan. That’s not shaping up to be the case. Premiums are rising, employer uncertainty is growing and voters aren’t viewing the law favorably – with many not even aware of the frontloaded benefits already in place. And even on the access side, the law of unintended consequences is kicking in: Some large retail companies are cutting back employee hours so they won’t have to offer health insurance. That’s not good for the economy or health care access.

Is the president unaware of the raft of unintended consequences or does he just think voters are?

Democrats are not so oblivious. In fact, they are verging on panic. Right now they are worried about the roll out. But the implementation, and resulting confusion, isn’t really the nub of the problem, although Sen. Max Baucus (D-Mont.) was honest enough to admit that in and of itself will be a “train wreck.” The onset of the most disruptive elements of Obamacare is the beginning not the end of the problems. All of these adverse consequences, and those no one has thought of yet, are inevitable when you attempt to regulate, centralize and micromanage health care for 300 million people. By its very nature, a mammoth new entitlement, unpaid for and imposing a host of new taxes, is going to be problematic in the extreme.

…Obamacare requires. Thousands of new IRS agents will implement 40-odd provisions of the Patient Protection and Affordable Care Act — the exact number is a matter of dispute since the law itself is so confusing. The largest tax law and social policy change in a generation will be imposed on a skeptical public by a government agency whose credibility is in ruins.

First, some companies now providing insurance are being hit with huge premium increases. Before Obamacare, said one PEO adviser, his clients typically received annual increases of 6 percent to 12 percent. “This year we’re seeing 30 percent rate hikes,” he said. The surge is blamed, rightly or wrongly, on the ACA’s requirement for more comprehensive coverage and on its formula for calculating premiums (aka “community rating”). Costlier insurance could cause some employers to drop it and others not to offer it. But modest increases in overall health spending could relieve pressure on premiums.

Second, most companies haven’t made final decisions. Those who have go both ways. Another adviser described a 250-worker car dealership with good wages but no health insurance; it will provide coverage and cut wages to help pay costs. Another example involved a 60-worker manufacturing firm with wages of $12 to $15 an hour. It offered bare-bones policies with steep deductibles. Confronting higher premiums for expanded coverage, the owner will drop insurance. He found the ACA “too complex,” said this adviser. Wages will be increased somewhat. With subsidies, workers might do better in the exchanges.

Third, many firms are revising their business models to minimize insurance costs. One favorite idea: Hold workers below the 30-hour weekly threshold requiring insurance. Many part-time employees who work more (say, 35 hours a week) will lose hours. One adviser discussed a movie-theater chain that will keep most staff below the threshold. Many restaurants and hotels may do likewise. Similarly, companies are striving to stay below the 50-employee ceiling that triggers the insurance mandate. Another adviser mentioned a client, an engineering firm with 48 workers, that had deliberately restrained expansion.

Except in the mind of a partisan ideologue, the evidence is abundant and apparent: Obamacare is a resounding dud.

Study: Health law to raise claims cost 32 percent

Wednesday, March 27, 2013

By: Associated Press

WASHINGTON — A new study finds that insurance companies will have to pay out an average of 32 percent more for medical claims on individual health policies under President Barack Obama’s health care overhaul.

What does that mean for you?

It could increase premiums for at least some Americans.

If you are uninsured, or you buy your policy directly from an insurance company, you should pay attention.

But if you have an employer plan, like most workers and their families, odds are you don’t have much to worry about.

The estimates from the Society of Actuaries could turn into a political headache for the Obama administration at a time when much of the country remains skeptical of the Affordable Care Act.

The administration is questioning the study, saying it doesn’t give a full picture — and costs will go down.

The study says claims costs will go up largely because sicker people will join the insurance pool. That’s because the law forbids insurers from turning down those with pre-existing medical problems, effective Jan. 1. Everyone gets sick sooner or later, but sicker people also use more health care services.

“Claims cost is the most important driver of health care premiums,” said Kristi Bohn, an actuary who worked on the study. Spending on sicker people and other high-cost groups will overwhelm an influx of younger, healthier people into the program, said the report.

The Obama administration challenged the design of the study, saying it focused only on one piece of the puzzle and ignored cost relief strategies in the law, such as tax credits to help people afford premiums and special payments to insurers who attract an outsize share of the sick.

The study also doesn’t take into account the potential price-cutting effect of competition in new state insurance markets that will go live Oct. 1, administration officials said.

At a White House briefing Tuesday, Health and Human Services Secretary Kathleen Sebelius said some of what passes for health insurance today is so skimpy it can’t be compared to the comprehensive coverage available under the law. “Some of these folks have very high catastrophic plans that don’t pay for anything unless you get hit by a bus,” she said. “They’re really mortgage protection, not health insurance.”

Sebelius said the picture on premiums won’t start coming into focus until insurers submit their bids. Those results may not be publicly known until late summer.

Another striking finding of the report was a wide disparity in cost impact among the states.
While some states will see medical claims costs per person decline, the report concluded that the overwhelming majority will see double-digit increases in their individual health insurance markets, where people purchase coverage directly from insurers.

The differences are big. By 2017, the estimated increase would be 62 percent for California, about 80 percent for Ohio, more than 20 percent for Florida and 67 percent for Maryland. Much of the reason for the higher claims costs is that sicker people are expected to join the pool, the report said.

Part of the reason for the wide disparities is that states have different populations and insurance rules. In the relatively small number of states where insurers were already restricted from charging higher rates to older, sicker people, the cost impact is less.
The report did not make similar estimates for employer plans that most workers and families rely on. That’s because the primary impact of Obama’s law is on people who don’t have coverage through their jobs.

A prominent national expert, recently retired Medicare chief actuary Rick Foster, said the report does “a credible job” of estimating potential enrollment and costs under the law, “without trying to tilt the answers in any particular direction.”

“Having said that,” Foster added, “actuaries tend to be financially conservative, so the various assumptions might be more inclined to consider what might go wrong than to anticipate that everything will work beautifully.” Actuaries use statistics and economic theory to make long-range cost projections for insurance and pension programs sponsored by businesses and government. The society is headquartered near Chicago.

Bohn, the actuary who worked on the study, acknowledged it did not attempt to estimate the effect of subsidies, insurer competition and other factors that could offset cost increases. She said the goal was to look at the underlying cost of medical care.

“We don’t see ourselves as a political organization,” Bohn added. “We are trying to figure out what the situation at hand is.”

On the plus side, the report found the law will cover more than 32 million currently uninsured Americans when fully phased in. And some states — including New York and Massachusetts — will see double-digit declines in costs for claims in the individual market.

Uncertainty over costs has been a major issue since the law passed three years ago, and remains so just months before a big push to cover the uninsured gets rolling Oct. 1. Middle-class households will be able to purchase subsidized private insurance in new marketplaces, while low-income people will be steered to Medicaid and other safety net programs. States are free to accept or reject a Medicaid expansion also offered under the law.
___

Health-care law uncertainty grips Old Town Alexandria cafe — and other small businesses

Jody Manor

By J.D. Harrison, Published: March 20

Jody Manor has run a small cafe and catering company for nearly three decades in Old Town Alexandria, only a few blocks from where he was born. Six years ago he purchased an adjoining building, and more recently he started searching for a second location.

Whether he moves forward with expansion depends on the price tag of the requirements mandated by the Affordable Care Act, President Obama’s signature health-care initiative.

Manor’s company employs 45 people. If he brings in just five more, his business would soon be subject to new minimum coverage standards under the 2010 law — and he does not know whether his current health plan would meet this threshold of coverage or how his premiums might be affected.

“These changes are less than a year away, and I still have no information about how much our premiums are going to cost,” said Manor, owner of Bittersweet Catering, Cafe and Bakery. “It definitely gives me pause when thinking about adding another location.”

Nearly three years after the health-care law was passed, federal regulators have only recently begun to define its terms. Major pieces of the overhaul, such as state-run exchanges that will serve as marketplaces for qualified health insurance plans, have yet to take shape, and several rules remain unwritten. Consequently, the picture remains anything but clear for small-business owners, some of whom have been warned that their premiums may spike and that their current coverage may fall short.

“There is tremendous confusion and fear among many of my competitors and other business owners in my network, particularly about what you have to cover and how you have to report,” said Hugh Joyce, owner of James River Air Conditioning in Richmond. “In speaking to them, I am convinced that the primary reason we aren’t seeing a robust economic recovery is the uncertainty and costs associated with this health-care law.”

Others are not so critical. They argue that the measures promise to rein in soaring health-care costs and provide a safety net to small businesses and employees, many of whom would be able to buy insurance through the exchanges.

The Department of Health and Human Services three weeks ago issued a final set of regulations on the minimum value for health insurance packages, mandating that plans cover at least 60 percent of health expenses and 10 primary areas of care, including maternity, ambulance and prescription services.

Joyce, whose company employs 150 people, provides what his insurers tell him will “probably qualify” as adequate coverage under the new rules, but he isn’t certain.

If his current plan falls short, experts say he won’t be alone in deciding whether to find a suitable alternative or pay a penalty.

The minimum-benefit plan mandated by the law “is broader than what’s currently offered by a lot of small businesses,” said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, a trade group for providers.

Zirkelbach warned that even firms that already offer sufficient coverage may see their premiums surge under the health-care law. New rules that restrict how insurers can structure their rates could drive prices higher across the board, he said, while small firms could be hit indirectly by a new fee on insurance providers, which some fear will be passed along to individuals and small employers in the form of higher premiums.

The situation only gets thornier for Joyce, who also owns a small art gallery with one full-time employee. Rules proposed this year by the Internal Revenue Service suggest that workers from separate firms owned by the same person will be totaled to determine an employer’s ultimate size. If so, Joyce will probably shift his gallery employee to part-time hours to avoid having to add coverage at his second business.

The IRS proposals include formulas for factoring part-time and seasonal workers into employee totals and calculating the penalty for failing to provide coverage — but none of the rules are set in stone, nor has the agency determined how employers will prove they provide adequate and affordable plans. The IRS is still collecting comments on the proposals and plans a public hearing in late April, so the final rules are not likely to be published until summer.

Meanwhile, many employers have seen their premiums rise or plans disappear as insurers prepare for the coming changes.

One in eight small-business owners who responded to a survey by the National Federation of Independent Business said their health insurance providers had notified them that their plans would be terminated. A study released last week by Adecco, a human resources consulting firm, showed that nearly a third of employers said they stopped hiring or cut their workforce because of the law.

Hoping to help small firms combat the rising costs, policymakers included a health-care tax credit for small businesses in the Affordable Care Act. Through the end of this year, the provision was meant to provide a tax break of up to 35 percent of health-care costs for tax-eligible small employers and 25 percent for tax-exempt groups such as charities. Next year, the credits are slated to rise to 50 percent and 35 percent, respectively.

But many have complained that an onerous application process has deterred business owners from claiming the credit, and the Government Accountability Office reported in May that only 170,300 of the nation’s 1.4 million eligible firms claimed the break in 2010.

James River Air Conditioning doesn’t qualify for the break, because the relief is limited to firms with no more than 25 employees. Joyce says his provider, Anthem Blue Cross Blue Shield, told him to expect an 18 percent spike in his premiums next year — higher even than the roughly 15 percent increases the firm has experienced each year since 2010.

“If our cost trajectory continues, in five to seven years the premiums will eat up all my net profit,” Joyce said. “It’s already hard out there right now, particularly for small and medium-size businesses. This may be the straw that breaks the camel’s back.”

The additional uncertainty is the last thing that Perry Casto, owner of Warrenton-based Allied Associates International, needed right now. His company, which provides cyber-intelligence and training services to the Defense Department, employs 70 people but has stopped hiring in light of federal budget cutbacks.

Casto’s firm may be particularly vulnerable to premium increases because many of its employees are young. Starting next year, the law mandates that insurers can no longer charge the elderly more than three times what they charge younger people for the same coverage.

Cori Uccello, senior health fellow at the American Association of Actuaries, says that could force insurers to raise premiums for young people to make up for the lower rates they can charge the elderly. Consequently, “employers with a younger worker population may be likely to see a higher increase in rates,” she said.

Casto’s business can probably absorb a 10 percent or 15 percent uptick, he said, but if annual premium increases approach 30 percent, “everyone will probably get less coverage.”

Manor, the Alexandria restaurant owner, says he would delay expansion before cutting back on coverage or moving employees to part-time status. That’s partly because the health-care perks he offers have been vital in helping his company retain some of its best employees.

“When you have people here 25 years, and you have seen them get married, have kids and build families, you don’t start cutting away at their health care,” Manor said. “We’re basically one big Latin family, and that’s just not an option.”

Before he came to work at Bittersweet 12 years ago, Jeffrey Allen, an executive on the sales team, said he received various types of health insurance from previous employers, none as generous as the plan he has now. He said his HMO allows him to book appointments online and expedites lab work and doctor visits.

“At my age, I basically work for my health insurance,” said Allen, who is 53.

WASHINGTON — One of the biggest threats to the success of President Obama’s health care law comes from shortages of doctors, nurses and other health care professionals. But a 15-member commission created to investigate the problem has never met in two and a half years because it has no money from Congress or the administration.

“It’s like ‘Waiting for Godot,’” said Dr. Richard D. Krugman, the dean of the University of Colorado Medical School and a member of the commission. “We are sitting on a park bench, waiting for Godot. We’ll see if he shows up.”

With an aging population and 30 million people expected to gain coverage under Mr. Obama’s health care law, the demand for medical care is expected to increase. But Dr. Sheldon M. Retchin, the vice chairman of the panel, the National Health Care Workforce Commission, said, “We are prohibited from meeting and discussing these issues.”

Members of the independent nonpartisan panel said they wanted to address these questions: How many more doctors are needed? What is the right mix of primary care physicians and specialists? Who will care for the millions of people gaining Medicaid coverage next year?

Should states rewrite their laws to allow nurse practitioners and physician assistants to do more of the work done by doctors? Could pharmacists play a larger role in coordinating care and managing the use of medications?

The commission was created by the 2010 health care law, the Affordable Care Act. Mr. Obama has requested $3 million for the panel in each of the last two years, and some Democrats, like Senator Tom Harkin of Iowa, chairman of the Appropriations subcommittee on health, have supported the request.

But Republicans in Congress have been reluctant to provide money for anything connected with the law, which they opposed. “Anything authorized in the Affordable Care Act has a tough road with the Republicans,” said Dr. Atul Grover, the chief lobbyist for the Association of American Medical Colleges.

The chairman of the commission, Peter I. Buerhaus, a professor of nursing at Vanderbilt University, said: “It’s a disappointing situation. The nation’s health care work force has many problems that are not being attended to. These problems were apparent before health care reform, and they will be even more pressing after health care reform.”

Dr. Krugman said the commission was “caught in a broader political struggle, and in the gridlock between Congress and the administration.”

Dr. Retchin, who is the senior vice president for health sciences at Virginia Commonwealth University in Richmond, said “the government needs to analyze the scope, caliber and composition of the health care work force” because labor costs accounted for a large share of the nation’s health care bill.

Members of the panel, appointed in September 2010 by the comptroller general of the United States, have no staff, no budget and no agenda.

Kim J. Gillan, the director of the work force training program at Montana State University Billings, said federal officials had made clear to her and other panel members that “we were not to function as a group or have contact with one another.”

Ms. Gillan said some people apparently feared that the commission might recommend the national licensing of health care professionals or other steps that could interfere with state prerogatives.

Another panel member, Prof. Thomas C. Ricketts of the University of North Carolina at Chapel Hill, said the Government Accountability Office, an investigative arm of Congress, had advised the panel that “we were not to work or be seen to be working.”

Dr. Krugman said, “We were told that we were to have no conversations until we were funded because that would be a violation of some federal law or rule.”

Chuck Young, a spokesman for the accountability office, said, “Agencies generally cannot conduct business without an appropriation.”

In a summary of research, the Department of Health and Human Services said, “The United States faces shortages of primary care physicians, dentists, nurses and other health professionals.”

Roger J. Moncarz, an economist at the Bureau of Labor Statistics, said that employment in health care occupations was expected to grow by 29 percent, with the addition of 3.5 million new jobs from 2010 to 2020. Federal officials expect 712,000 new jobs for registered nurses — more than for any other occupation in the country — and a total of 1.3 million new jobs for home health and personal care aides, he said.

Edward S. Salsberg, the director of the National Center for Health Workforce Analysis at the Health and Human Services Department, said 57 million people were living in areas with shortages of primary care practitioners.

President Obama’s health care law will push 7 million people out of their job-based insurance coverage — nearly twice the previous estimate, according to the latest estimates from the Congressional Budget Office released Tuesday.

Health insurance companies across the country are seeking and winning double-digit increases in premiums for some customers, even though one of the biggest objectives of the Obama administration’s health care law was to stem the rapid rise in insurance costs for consumers.

Particularly vulnerable to the high rates are small businesses and people who do not have employer-provided insurance and must buy it on their own.

In California, Aetna is proposing rate increases of as much as 22 percent, Anthem Blue Cross 26 percent and Blue Shield of California 20 percent for some of those policy holders, according to the insurers’ filings with the state for 2013. These rate requests are all the more striking after a 39 percent rise sought by Anthem Blue Cross in 2010 helped give impetus to the law, known as the Affordable Care Act, which was passed the same year and will not be fully in effect until 2014.

In other states, like Florida and Ohio, insurers have been able to raise rates by at least 20 percent for some policy holders. The rate increases can amount to several hundred dollars a month.

The proposed increases compare with about 4 percent for families with employer-based policies.

The president claimed his national health insurance is driving down medical costs. It’s actually the reverse. ABC News reported on the conclusion of the nonpartisan Health Care Institute: “ Spending on health care rose 4.6 percent in 2011 — up $4,500 per person, on average.” The network also noted a Kaiser Family Foundation report that said, “Health insurance premiums for individuals and families also climbed year-over-year, up 3 percent ($186) on average for an individual and 4 percent ($672) on average for a family.”

The Washington Times reported, “President Obama’s health-care law will push 7 million people out of their job-based insurance coverage — nearly twice the previous estimate, according to the latest estimates from the Congressional Budget Office.”

For millions of Americans, all they really want for Christmas is decent health-care coverage. It’s a wish they’ve repeated over and over, and now it will come true. Obamacare has withstood the legal and political onslaught of its enemies. On January 1, 2014 — just over one year away — it will arrive.

Americans of all ages, healthy and sick, will join their counterparts in every other advanced nation by having access to affordable health insurance. Hallelujah.

Joyous good tidings, indeed. But lurking in the background, like a modern-day Ebenezer Scrooge about to snatch the last lump of coal from Bob Cratchit’s pitiful warming fire, are some of the nation’s largest employers of low-wage workers plotting to make their employees’ lives harder.

Think it’s tough getting by on $10 per hour? Just wait until corporate executives finish slashing the hours of their restaurant, hotel and retail workers to under 30 per week. That’s the plan. By slighting workers the hours they need to make any kind of decent living, employers will be able to dump their health insurance obligations under Obamacare onto taxpayers.

In the most high-profile case, Darden Restaurants, the Orlando-based owner of Olive Garden, Red Lobster and Longhorn Steakhouse, announced that it was testing a plan to deny workers full-time schedules; however, the public outcry over such a policy forced the company to back down. Darden told the Orlando Sentinel in October that keeping employees at 28 hours a week was one possible way to “address the cost implications health-care reform will have on our business.”

Under the Affordable Care Act, beginning in 2014, employers with 50 or more full-time employees must provide affordable health insurance to their workforce or pay a penalty of up to $3,000 per worker. The loophole is that the rules don’t apply to part-time workers, defined as someone who works less than 30 hours on average per week.

For instance, Pillar Hotels & Resorts, a company that controls hundreds of franchise hotels, including Sheraton and Holiday Inn, was reported by The Wall Street Journal to be embarking on a plan to hire more part-time workers to limit health-care costs. CKE Restaurants, Inc., the parent company of Carl’s Jr. and Hardee’s, also told The Journal that it is now hiring part-time workers to replace full-timers who have left. And these are just the companies who are willing to fess up.

Part-time workers will get health-care coverage, but you and I will pay for it. Under Obamacare, people making up to four times the federal poverty rate ($92,200 for a family of four) will qualify for federally subsidized health insurance from an online exchange, and expanded Medicaid will be available to everyone making under 133 percent of the poverty rate ($30,657 for a family of four) in states that opt to participate.

Then there’s Walmart. As the nation’s largest private employer, and a low-paying one at that, no story of employer iniquity would be complete without it. Walmart already employs a disproportionate number of workers who supplement their wages with government benefits for the poor, especially Medicaid. Now the retail giant may be shifting even more of its health-care costs onto the rest of us.

In Walmart’s 2013 “Associate’s Benefits Book,” employees hired after Feb. 1, 2012, who work less than 30 hours a week will be denied employer-sponsored health coverage, according to Alice Hines of the Huffington Post. This is worrying because workers have little control over their schedules. Company spokesman Randy Hargrove rejects Hines’ insinuations. He says that Walmart is “not looking to cut hours.” But considering the company’s track record, it strains credulity to think managers won’t cut costs this way in the long run.

Remember how the Ghost of Christmas Yet to Come in Charles Dickens’ A Christmas Carol looked so foreboding? Well, in one year, health-care security will be the nation’s Christmas gift to itself, but what mischief will befall low-wage workers as a result? Only the nation’s Scrooges can say

US retailers and restaurants chains that employ millions of low-wage workers are considering cutting working hours or paying fines rather than enrolling employees in health insurance plans under Barack Obama’s landmark healthcare law. Employers are concerned that the law increases the cost of insuring employees on existing plans, partly by broadening the range of benefits. It also requires companies to insure some employees not previously covered.

Eighty-three percent of American physicians have considered leaving their practices over President Barack Obama’s health care reform law, according to a survey released by the Doctor Patient Medical Association.

The DPMA, a non-partisan association of doctors and patients,

surveyed a random selection of 699 doctors nationwide. The survey found that the majority have thought about bailing out of their careers over the legislation, which was upheld last month by the Supreme Court.

Even if doctors do not quit their jobs over the ruling, America will face a shortage of at least 90,000 doctors by 2020. The new health care law increases demand for physicians by expanding insurance coverage. This change will exacerbate the current shortage as more Americans live past 65.

By 2025 the shortage will balloon to over 130,000, Len Marquez, the director of government relations at the American Association of Medical Colleges, told The Daily Caller.

“One of our primary concerns is that you’ve got an aging physician workforce and you have these new beneficiaries — these newly insured people — coming through the system,” he said. “There will be strains and there will be physician shortages.”

The DPMA found that many doctors do not believe the Patient Protection and Affordable Care Act will lead to better access to medical care for the majority of Americans, co-founder of the DPMA Kathryn Serkes told TheDC.

“Doctors clearly understand what Washington does not — that a piece of paper that says you are ‘covered’ by insurance or ‘enrolled’ in Medicare or Medicaid does not translate to actual medical care when doctors can’t afford to see patients at the lowball payments, and patients have to jump through government and insurance company bureaucratic hoops,” she said.

The American Medical Association, which endorsed Obama’s health care overhaul, was not able to immediately offer comment on the survey. Spokesperson Heather Lasher Todd said it would take time to review the information in the survey.

Janelle Davis of the American Academy of Family Physicians said the AAFP could not provide thoughtful commentary without studying the survey’s findings and methodology.

Higher health care bills ahead
Cost of medical benefits projected to jump next year, with premiums and out-of-pocket expenses rising more than 12%

September 26, 2010 | By Bruce Japsen, Tribune reporter

Workers can expect to pay hundreds of dollars more for their health care coverage next year.

In 2011, the combined average of premium and out-of-pocket costs for health care coverage for an employee is projected to climb to $4,386, according to an annual study by Hewitt Associates to be released this week. That’s a 12.4 percent increase, or $486, over this year.

Companies, meanwhile, will see their health insurance costs go up nearly 9 percent, to an annual tab of $9,821 per employee, or double the employer’s annual worker tab from nine years ago, according to Lincolnshire-based Hewitt.

“The practical reality is we are now getting to the point where the average employee is costing the average employer $10,000 a year for health care,” said John Vlajkovic, principal in Hewitt’s health management practice.

Overall health care costs continue to rise 6 percent to 8 percent annually, primarily because advances in medical technology and the increasing use of medical services by an aging population.

And in the wake of the recession, employment trends also are affecting health care costs: Companies are hiring fewer younger people, so premiums paid by this segment of the working population who typically use fewer health services are not absorbing the costs of older employees who do.

“An older population tends to have chronic conditions like diabetes,” Vlajkovic said. “And when your hiring rates have slowed, you are not bringing in a younger work force.”

Premiums are being affected by the implementation of the new federal health care law, but the impact is expected to be minimal.

“Health care reform has added to the cost burden, but that is only an additional percent or two,” Vlajkovic said.

Industry analysts have said the health law could temper cost increases for everybody once the more than 30 million uninsured have coverage because it will spread risk over a larger population. But that will take time. Although several major new consumer benefits started last week, this broadened coverage will not go into effect until 2014.

“Reform creates opportunities for meaningful change in how health care is delivered in the U.S., but most of these positive effects won’t be felt for a few years,” said Ken Sperling, Hewitt’s health care practice leader. “In the meantime, employers continue to struggle to balance the significant health care needs of an aging work force with the economic realities of a difficult business environment.”

Next year, workers are expected to contribute about $184 a month, 12 percent more than they do now. Their out-of-pocket costs will jump, too, rising 12.5 percent, to $181 a month in expenses, which include covering deductibles as well as co-payments and co-insurance for prescriptions and visits to the doctor.

Workers will get a first glimpse of health care costs during the coming weeks of open-enrollment season, the annual corporate ritual that allows employees to select or change their benefit plans for the following year.

Hewitt’s projections are calculated using data from 350 major employers and more than 14 million health plan participants spending more than $50 billion annually on health care, and they are averaged out per worker. Employees with family coverage tend to pay more, and workers with single coverage tend to pay less.

And because Hewitt’s survey focuses on employers with an average of 16,000 employees, businesses with fewer workers tend to have higher costs than those highlighted in the survey.

Some companies are warning workers to expect cost changes in their health care coverage.

Boeing Co., the Chicago-based aerospace giant, will ask certain nonunion employees to shoulder more of the burden of health costs in 2011.

“Health care coverage for employees represented by unions is governed by collective bargaining agreements and will be discussed as those contracts are renegotiated,” Jim Albaugh, president of Boeing’s commercial airplane division, said in a Sept. 13 e-mail to employees. Boeing declined to disclose the increases ahead of informing its workers in October.

This year, Boeing is paying 89 percent of total health care costs for employees, which is well above the national average. Most employers pay about 78 percent of the total premium, according to Hewitt’s survey.

“The soaring cost of health care, which for decades has exceeded the rate of inflation, has had a profound impact on our company and our ability to offer superior products at competitive prices,” Albaugh said in the e-mail.

WASHINGTON – The new health-care law wasn’t supposed to undercut employer plans that have provided most people in the U.S. with coverage for generations.

But last week a leading manufacturer told workers their costs will jump partly because of the law. Also, a Democratic governor laid out a scheme for employers to get out of health care by shifting workers into taxpayer-subsidized insurance markets that open in 2014.

While it’s too early to proclaim the demise of job-based coverage, corporate number crunchers are looking at options that could lead to major changes. Gov. Phil Bredesen, D-Tenn., said the economics of dropping coverage are “about to become very attractive to many employers, both public and private.”

That’s just not going to happen, White House officials say.

“The absolute certainty about the Affordable Care Act is that for many, many employers who cover millions of people, it increases the incentives for them to offer coverage,” said Jason Furman, an economic adviser to President Barack Obama.

Yet at least one major employer has shifted a greater share of plan costs to workers, and others are weighing the pros and cons of eventually forcing employees to strike out on their own.

“I don’t think you are going to hear anybody publicly say ‘We’ve made a decision to drop insurance,’ ” said Paul Keckley, executive director of the Deloitte Center for Health Solutions. “What we are hearing in our meetings is, ‘We don’t want to be the first one to drop benefits, but we would be the fast second.’ We are hearing that a lot.” Deloitte is a major accounting and consulting firm.

“My conclusion on all of this is that it is a huge roll of the dice,” said James Klein, president of the American Benefits Council, which represents big company benefits administrators. “It could work out well and build on the employer-based system, or it could begin to dismantle the employer-based system.”

Employer health benefits have been a middle-class mainstay since World War II, when companies were encouraged to offer health insurance instead of pay raises. About 150 million workers and family members are now covered.

When lawmakers debated the legislation, the nonpartisan Congressional Budget Office projected it would only have minimal impact on employer plans. About 3 million fewer people would be covered through the job, but they’d be able to get insurance elsewhere.

Two provisions in the new law are leading companies to look at their plans in a different light.

One is a hefty tax on high-cost health insurance aimed at the most generous coverage. Although the “Cadillac tax” doesn’t hit until 2018, companies may have to disclose their exposure to investors well before that. Karen Forte, a Boeing spokeswoman, said concerns about the tax were partly behind a 50 percent increase in insurance deductibles the company just announced.

The tax is 40 percent of the value of a plan above $10,200 for individual coverage and $27,500 for a family plan. Family coverage now averages about $13,800.

White House adviser Furman said blaming a cost increase next year on a tax that won’t take effect for eight years “stretches credibility very far past the breaking point.”

Bigger questions loom over the new insurance markets that will be set up under the law.

They’re called exchanges, and every state will have one in a few years. Consumers will be able to shop for coverage among a range of plans in the exchange, with a guarantee they can’t be turned down because of an existing medical problem. To help make premiums affordable, the law provides tax credits for households making up to four times the federal poverty level, about $88,000 for a family of four.

Bredesen said last week that employers could save big money by dropping their health plans and sending workers to buy coverage in the exchange. They’d face a fine of $2,000 per worker, but that’s still way less than the cost of providing health insurance. Employers could even afford to give workers a raise and still come out ahead, Bredesen wrote in a Wall Street Journal opinion piece.

Employers are actively looking at that. “I don’t know if the intent was to find an exit strategy for providing benefits, but the bill as written provides the mechanism,” said Deloitte’s Keckley, the consultant.

Erin Shields, a spokeswoman for the senators who wrote that part of the law, says she’s confident that when companies do the math, they’ll decide to keep offering coverage.

That’s because employers get to deduct the cost of workers’ health care from the company’s taxes. Take away the health plan and two things happen: Employers lose the deduction and they’ll probably have to pay workers more to get them to accept the benefit cut. Not only will the company’s income taxes go up, but the employer will also face a bigger bill for Social Security and Medicare payroll taxes. So it’s not as simple as paying $2,000 and walking away.

Another wrinkle: the health insurance tax credits available through the law are keyed to relatively Spartan insurance plans, not as generous as most big employers provide. Send your workers into the insurance exchange, and valuable employees might jump to a competitor that still offers health care.

MIT economist Jon Gruber says it’s impossible to create new government benefits without some unintended consequences, but he doesn’t see a big drop in employer coverage. “This is a brave new world with uncertainties,” said Gruber. But “the best available evidence suggests a small erosion. It’s not going go down wildly.”

Obamacare: Still poison in 2012

Patrick McIlheran

Repeal-minded though Republicans are, it’ll be practically impossible for them to dismantle Obamacare, analysts were saying Wednesday. True enough: The coming mandates and micromanaging are now law, which takes two houses of Congress and a president’s signature to undo.

But how much tougher is the road ahead for the president, who must sell the nation on gifts he has given and that voters Tuesday emphatically rejected.

Take Obamacare: The president and congressional Democrats all along said that you may not understand it yet but once you do, you’ll love it.

This was belied by polls showing that as parts of the vast contraption were revealed, the public liked it less.

Then came Tuesday. Nothing was so fatal to House Democrats, especially newbies, than to have voted for Obamacare. Dozens fell, including Rep. Steve Kagen (D-Appleton). The one Republican who favored it lost.

Running against it saved the jobs of 11 out of 34 Democrats who had opposed the bill, and a popular Democratic governor won West Virginia’s Senate seat only after he reversed to say he’d oppose Obamacare.

In Wisconsin, the Senate race became a referendum after incumbent Russ Feingold stood firm for Obamacare. Victorious challenger Ron Johnson spent the campaign telling how it was the bill’s passage that goaded him into running. At every turn, he said he was convinced it is a government takeover that will kill innovation.

He pointed out repeatedly that fear of the plan’s costs were depressing the economy.

Johnson won, 52% to 47%. For anyone tempted to say Obamacare’s problem was that it didn’t go far enough, Johnson beat a senator who’d become the darling of progressives nationally in part by advocating a more radical single-payer plan. Feingold said his doubt about Obamacare was that it was a halfway measure. He’s now looking for work.

Obamacare, meanwhile, is law, its provisions over the next few years falling into place like the tumblers in fate’s deadbolt.

The president and many more Democratic senators face election in two years having already made this electoral poison inevitable. No one will so wish it repealable as they.

But it’s not just Obamacare. Another transformational gift from the president was high-speed rail, into which he wants to pour billions so that fewer of us drive or fly.

One of the biggest first dollops of aid went to Wisconsin to buy us a train from Milwaukee to Madison.

Our gratitude was such that the president twice had to send his transportation secretary to boast that the train was unstoppable, and our outgoing governor had to frantically commit as much of the money as he could before election day.

Result: The candidate who swore repeatedly to stop this “gift” and its unending costs, Scott Walker, is governor-elect.

Do not say that Walker’s victory was instead about jobs or the economy, since his Democratic opponent, Tom Barrett, said the train would create jobs and goose the economy.

Barrett and his side bound jobs, economy and the transformational train into a bundle that voters did not buy. Yet as of Wednesday, the president was committed to stuffing this gift into our hands. That’s his strategy to win Wisconsin in 2012.

Walker on Wednesday said he was confident Wisconsin could reject the train. He noted a parallel: The supposedly inexorable and broadly insufferable giant blue-shirt sculpture that officials had committed to putting on an airport garage just before Walker became Milwaukee County executive. It was successfully canceled.

The train is a much bigger deal, but elements – free federal money, contracts already signed – match up. So does the underlying conflict.

Citizens are told of some scheme for their collective improvement. A majority says no. Officials hint that we’re too moronic to grasp what’s good for us and proceed to do what they think we ought to be grateful for.

Obamacare’s the same thing, only far, far grander. This shouldn’t surprise us. It all fits the progressive’s understanding of America as a herd that insists on the forms of democracy but upon whom the wise must impose improvements anyhow.

Those forms of democracy walloped Democrats Tuesday. The next walloping may be exactly as unrepealable as Obamacare.

Examiner Editorial: Obamacare is even worse than critics thought

Examiner Editorial
September 22, 2010

Much more has been revealed about Obamacare since President Obama, Harry Reid and Nancy Pelosi pushed the bill on Americans six months ago.

Six months ago, President Obama, Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi rammed Obamacare down the throats of an unwilling American public. Half a year removed from the unprecedented legislative chicanery and backroom dealing that characterized the bill’s passage, we know much more about the bill than we did then. A few of the revelations:

» Obamacare won’t decrease health care costs for the government. According to Medicare’s actuary, it will increase costs. The same is likely to happen for privately funded health care.

» As written, Obamacare covers elective abortions, contrary to Obama’s promise that it wouldn’t. This means that tax dollars will be used to pay for a procedure millions of Americans across the political spectrum view as immoral. Supposedly, the Department of Health and Human Services will bar abortion coverage with new regulations but these will likely be tied up for years in litigation, and in the end may not survive the court challenge.

» Obamacare won’t allow employees or most small businesses to keep the coverage they have and like. By Obama’s estimates, as many as 69 percent of employees, 80 percent of small businesses, and 64 percent of large businesses will be forced to change coverage, probably to more expensive plans.

» Obamacare will increase insurance premiums — in some places, it already has. Insurers, suddenly forced to cover clients’ children until age 26, have little choice but to raise premiums, and they attribute to Obamacare’s mandates a 1 to 9 percent increase. Obama’s only method of preventing massive rate increases so far has been to threaten insurers.

» Obamacare forces states to guarantee not only payment but also treatment for indigent Medicaid patients. With many doctors now refusing to take Medicaid (because they lose money doing so), cash-strapped states could be sued and ordered to increase reimbursement rates beyond their means.

» Obamacare imposes a huge non-medical tax compliance burden on small business. It will require them to mail IRS 1099 tax forms to every vendor from whom they make purchases of more than $600 in a year, with duplicate forms going to the Internal Revenue Service. Like so much else in the 2,500-page bill, our senators and representatives were apparently unaware of this when they passed the measure.

» Obamacare allows the IRS to confiscate part or all of your tax refund if you do not purchase a qualified insurance plan. The bill funds 16,000 new IRS agents to make sure Americans stay in line.

If you wonder why so many American voters are angry, and no longer give Obama the benefit of the doubt on a variety of issues, you need look no further than Obamacare, whose birthday gift to America might just be a GOP congressional majority.

The Jupiter internist would see 30 people a day, treating ailments, battling insurance companies, handling paperwork. He felt stressed. His staff was stressed. His patients were stressed.

That’s what led him to join a growing corps of physicians becoming concierge doctors. In return for a $1,500 annual fee, his patients receive a personal focus and a happy, rested doctor who sees around eight patients a day.

As health reform prepares to send another 32 million people into the already stressed health system, some say that concierge medicine is the future — where the wealthy see the best primary care doctors in a luxury setting, and everyone else makes do with clinics staffed by “physician extenders” such as nurse practitioners.

“It’s already happening,” says Dr. Bernard Kaminetsky of Boca Raton, one of MDVIP’s founding partners. “It’s already hard to see the best doctors.”

Ten years ago, Kaminetsky and two other Boca Raton physicians launched MDVIP. Today, because of health reform, the Boca Raton company is projected to grow by double digits for many years into the future.

More than 430 MDVIP doctors now practice in 31 states, seeing 138,000 patients. The growth, nearing 25 percent a year, persuaded Procter & Gamble to become 100 percent owner of MDVIP in December.

Meanwhile, its concept has been copied, and some observers put the number of concierge doctors nationwide at 5,000.

Nine years ago, Gocke was among the first to sign up with MDVIP.

“A patient came into my office one day and said, ‘Mark I want you to join MDVIP,’ ” he recalled. “The initial reaction was, ‘I don’t want to be a VIP doctor; I want to be a regular doctor.’ ”

But he was increasingly having difficulty doing that. His patient load allowed no more than seven or eight minutes per visit. He’d treat problems, not plan for wellness. He came to the conclusion that while he couldn’t fix what was ailing the medical system, he could make his own little corner of it work properly.

“My patients wanted more time with me. When you have 3,000 or 5,000 patients, that’s not possible,” he said. He has 500 patients now.

His work life is dramatically different. He passes out his cellphone number and visits patients daily if they’re hospitalized. He works with an acupuncturist and a psychologist, incorporating stress-reduction techniques such as music therapy.

“There is this ineffable quality of medicine, that my patients know me, they trust me,” he said. “There is this sense of relief. They can trust my judgment. We are familiar.”

Those left behind, however, aren’t so pleased.

Initially, MDVIP’s newly signed doctors sent patients polite letters recommending they switch to another doctor unless they could join MDVIP at a charge of $1,500.

Some patients were outraged, especially seniors on fixed incomes. Their cries of abandonment caught the attention of Congress.

In a 2001 letter, five members of Congress demanded that Tommy Thompson, then secretary of the U.S. Department of Health and Human Services, investigate whether the company was overbilling for Medicare services under guise of a fee.

Thompson concluded they were within the law. A Government Accountability Office report a few years later came to the same conclusion and suggested that the trend wouldn’t grow enough to threaten access to care.

Later, when Thompson considered a presidential run in 2007, MDVIP executives wrote checks. Today, Thompson has a paid position with the company as a “health-care initiatives adviser.”

“After he was in the private sector, he expressed an interest in being an adviser with the company, which we heartily welcomed,” Kaminetsky said.

Thompson said he’s been impressed with the quality of care MDVIP patients receive.

”I think they are on the cutting edge of something that maybe health care can learn a great deal from, the focus on wellness,” Thompson said.

Thompson is not the only current or former federal official with a close personal connection to MDVIP.

Those outraged congressmen? One is now a patient, Kaminetsky said. “We have among our members parents of several very high-level Obama administration appointees — at a Cabinet, secretary and undersecretary level.”

Today, MDVIP is headed by Procter & Gamble executive Dan Hecht.

Hecht’s expertise has been in developing and commercializing products such as Actonel, a multibillion-dollar osteoporosis drug.

Now he’s commercializing the doctor-patient relationship, hoping to take its appeal beyond the wealthy and into the middle class.

“This is for patients who prioritize their relationship with their doctor,” Hecht said.

He points to two key data points: More than 90 percent of MDVIP’s patients renew every year. Furthermore, they are significantly less likely to be hospitalized, according to the company’s own sponsored studies. Its Medicare patients in particular are hospitalized at a rate 75 percent lower than others.

As MDVIP evolves under P&G’s watch, the company intends to stay in Boca Raton and will add jobs, especially in its call center and its physician transition support staff, Hecht said.

Thirty-eight physicians from the Treasure Coast to Key West have signed on.

Those numbers aren’t having a serious effect on access to primary care doctors in Palm Beach County, said county Health Department Director Dr. Alina Alonso. Many MDVIP doctors are using their freed-up time to provide volunteer care to the poor and uninsured, she added.

“My hope would be that as they gain financially from those who can afford, MDVIP doctors will also follow their colleagues in volunteering,” she said.

Gocke said he provides “scholarship” memberships to some patients. And while he laments having to let some patients move on, he wouldn’t go back.

“I certainly worry about medicine in general and what direction we are headed in — how we are going to care for all the uninsured,” Gocke said.

So many things in the world are over-stressed, he said. He doesn’t want to be one of them.

“This is us in our corner of the universe trying to figure out, ‘How can I do this in a way that works?’ ” Gocke said.